Commercial Vehicle Insurance

SafetyFirstAn interesting article titled “Insurance: You Can’t Avoid Risk” appears in the September 2014 issue of FleetOwner.

This article caught my attention at the second paragraph:

Crashes involving trucks and the resulting insurance claims can grab quite a chunk from the bottom line of any motor carrier [or any company operating a fleet of vehicles – SF]. According to data compiled several years ago by the Federal Motor Carrier Safety Administration (FMCSA), the cost of a crash involving one Class 8 tractor pulling a single 53-ft. trailer runs to $172,292.  If just one person gets injured in such a crash, the average cost balloons to $334,892.  And if a fatality occurs in such a crash, the average cost skyrockets to over $7.6 million.

The article also comments that insurance costs to cover premiums and out of pocket costs can be as much as 4% of the total cost of operation (TCO).

PoliceFleets looking to reduce their costs can ask for discounts and creative payment plans, but in order to materially reduce insurance expense, the only long-term solution is to earnestly work to reduce their risk of loss through aggressive and tailored crash-avoidance strategies.

Naturally, we can’t control how the general public drives on any given day, but as transportation safety professionals, fleet management teams can work with their commercial drivers, insurers, and current safety vendors to increase results.

Ideas to consider:

  1. Smash through the most common barrier to results: complacency. Many fleet teams think they’ve done all that they can and sometimes it can be hard to re-evaluate and re-tool programs to get better results.  “We’ve always done it this way” and “don’t fix what isn’t broken” are dangerous phrases if you’re sincere about enhancing risk results. It’s easy to assume that everything is working well and focus on trying “new stuff” just because it’s new and trendy, but sometimes it’s the underlying (un-sexy) tasks that are slipping through the cracks.  Be honest in evaluating what’s working and what could work better.
  2. Increase vigilance and safety awareness – just as consciously scanning the road ahead for possible hazards and motorists who may cut off trucks is critical to safe driving, management teams also have a responsibility to forecast ways to increase safety in their operations and processes.  Careful analysis of past crashes and understanding what might have contributed to them happening from a process and systems standpoint may uncover opportunities to improve your management strategy.
  3. Develop an even stronger communication strategy with drivers – not just talking at them or demanding more from them, but also learning to listen carefully to their feedback about what’s working and what’s failing to work as well as it could or should. Understanding what processes and systems keep drivers from excelling at their job and helping them with appropriate assistance could be an area to leverage.
  4. Integrate technology where it will help the most.  Technology can be applied in most fleet operations to help deliver insights into ways to increase efficiency or improve safety factors.  The trouble is that for most fleets technology can be disruptive as well. There’s a learning curve to adopting new systems and there must be vigilance in translating these data packets into meaningful management action.  If the follow up isn’t helpful to drivers or other team members, then it may not be worth the effort. One example could be adopting an online education program to refresh drivers on basic safety issues.  If the program is difficult to access, or the videos are tedious, too long, boring or poorly executed then drivers won’t pay attention or change habits.  Investing in a system that is easy to use and has interesting, short programs may be a better course of action.
  5. Actively monitor / manage your CSA scores.  While the CSA score isn’t the best indicator of operational excellence, your team shouldn’t ignore this score, either.  The Bookend BASICS have been discussed elsewhere on this blog — Unsafe Driving and Crash Rate.  When the bookends are firmly managed, the stuff in the middle tends to sort itself out, too.
  6. Don’t be shy in asking for help from your insurer.  Most insurers offer loss control support in various ways — consultants, technical bulletins, and other resources are available but only if you ask for them.  Agents can review your current policies to make sure you have appropriate coverage, and help you navigate the service offerings that come with your policy to be certain you’re getting the maximum benefit for the cost you’ve already agreed to pay.
  7. Leverage your existing safety vendor relationships. Many fleets already work with safety support vendors on issue ranging from log auditing to DQF maintenance.
    1. Are you using the most current service offering from each vendor?
    2. Are there new benefits or features that you could be using?
    3. Does your vendor offer a support network, webinars, or other meetings that could introduce new ideas or help you network with peers in order to increase safety results?
  8. Join, and participate in, a vehicle safety networking group.  Hearing about other peer’s experiences can help you save time, get to decisions more quickly and leverage other professionals learning lessons (why make the same mistake, or why not benefit if they’ve already proven something works well?)  Of course, this commitment works best when you’re an active participant – sharing with the group your own experiences.  It won’t work as well if you join and then lurk in the shadows quietly.

Managing insurance costs is important.  You want to have the right coverage for when things go wrong unexpectedly, but you also want to do whatever is practical to avoid claims or keep their costs as low as possible.

There are many safety articles at this blog site to give you more ideas on ways to prevent crashes.

Let us know what you do that works well at your fleet!

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Dynamic Duo: Healthy Pay & Respect

moneyAmong the most common search terms used to find this blog site are “incentives”; “bonus” and “rewards”.  There is, evidently, a lot of interest among fleets to tie safety performance (and tenure) to incentive or reward programs.

While we’ve offered articles on those topics in the past (“Driver Recruitment and Retention: A Winning Combination” for example, or just use our search function at this site if you’re curious about other articles), we figured it was time for another update.

Recently, Heavy Duty Trucking published an article titled “Finding and Keeping Driver With The One-Two Punch: Pay & Respect” (Click HERE to see the entire article). While their article was more concerned about recruiting and retention than safety, some of the themes and advice could apply to safety issues as well.

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A couple of interesting quotes from the article include:

  • Large truckload carriers have seen their turnover rate hold above 90% for eight quarters in a row, according to the latest figures from the American Trucking Associations.
  • Generally drivers cite two main broad reasons for jumping from one company to another: pay and respect. And the same factors that can keep drivers with your company can also help attract new drivers to your company – especially when you consider the importance of word-of-mouth and referrals.
  • More companies are avoiding across-the-board mileage pay increases in favor of various incentive packages, bonuses and incentives that reward the best performers.
  • Fuel economy is a major driver of these types of programs. But perhaps just as important is safety and compliance.
  • “Driver retention comes down to having quality relationships with your drivers,” says Andrew Winkler, director of operations at Nebraska-based Grand Island Express, which had a driver turnover rate in 2013 of 36%.  “Happy drivers don’t leave good carriers. Treat them with the respect they deserve…and that starts at the top. Our president insists on meeting face to face with each new driver or orientation class.”

SafetyFirst

Driver Safety Hotline – Coaching for Results

SafetyFirstIt is uncontested that 80% of all commercial drivers drive consistently well, but a small percentage have “bad habits” that contribute to the vast majority of crashes and “near-misses”.

How do you identify these drivers so that you can effectively help them drive better tomorrow so that they:

  • Do go home to their families
  • Do make their deliveries on time
  • Do receive positive training, not punishment
  • Do understand that safety is serious
  • Do help protect the company’s image
  • Don’t have to sit through depositions
  • Don’t get hurt or killed
  • Don’t get a moving violation
  • Don’t have their personal insurance rates jump
  • Don’t reduce their “employability” due to tickets or accidents

The best way to identify these drivers is with a simple, low-cost, turn-key solution.  Our hotline program spots those drivers, who, if their behaviors were ignored, would end up with a violation or crash event.

  1. We send you a report about specific incidents.  We also send Training Materials tied to the specifics of the incident.
  2. You talk with your driver – not to fix blame, but to help them fix any underlying safety problems.  Additionally to help them understand that the goal is safety – to avoid injury no matter who or what was the cause of the reported incident.
  3. SafetyZone-LMSYou assign one OR MORE 5-7 minute remedial, online, interactive modules specifically related to the incident described in the report.
  4. You send us the completed coaching report and we track your driver’s progress in completing the online portion of the program.
  5. We provide a monthly recap of progress and patterns in activity.
  6. We send a monthly training package to help ALL of your drivers with safety.

That’s it.  It is very simple, very inexpensive and highly effective.

Pyramid 2011 for blogAlso, if you prefer, we can integrate our MVR system, DOT compliance database and GPS systems into the solution for a fully-encompassing approach to driver safety.